Fines assessed by Occupational Safety and Health Administration (OSHA) will increase significantly next month. OSHA is one of several government agencies that must increase its civil monetary penalties pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act. Will these increased OHSA fines affect you?
Federal Civil Penalties Inflation Adjustment Act Improvements Act
Under the statute, federal agencies must adjust penalties for inflation every year. However, the amount of the increase may not exceed 150% of the existing penalty amount. OSHA’s maximum penalties, which have not been raised since 1990, will increase by 78 percent. The top penalty for serious OSHA violations will rise from $7,000 to $12,471. The maximum penalty for willful or repeated violations will increase from $70,000 to $124,709.
OSHA’s new civil penalty amounts apply only to civil penalties assessed after Aug. 1, 2016, whose associated violations occurred after Nov. 2, 2015. Going forward, OSHA will continue to adjust its penalties for inflation each year based on the Consumer Price Index.
Are there benefits of this increase in OSHA fines?
As highlighted by the Department of Labor, “These penalty increases will also deter violations, which will provide a significant benefit not only for workers but also for responsible employers who will have a more level playing field when competing with employers who are not following the law.”
According to OSHA, to address the impact of these penalty increases on smaller businesses, the agency will continue to provide penalty reductions based on the size of the employer and other factors. The agency also plans to provide guidance on the implementation of the new penalties by August 1, 2016.
Finally, it is important to highlight that states that run their own Occupational Safety and Health Plans must adopt maximum penalty levels that are at least as effective as those established by OSHA.